BERLIN (Reuters) - A leading member of Chancellor Angela Merkel’s Bavarian sister party has urged euro zone states with triple-A credit ratings to band together to restore confidence in the currency bloc in the face of what he called “problem children” like France and Italy.
Hans Michelbach of the Christian Social Union (CSU) told the Handelsblatt newspaper that deeper cooperation between Germany, the Netherlands and Finland on the recent bailout agreement for Cyprus had shown what the euro area’s top-rated countries could accomplish when they stuck together.
“This should set an example, it should spur deeper cooperation between the top-rated states in the community. That could help strengthen confidence in the common currency among citizens and investors,” said Michelbach, without providing details on what sort of closer ties these countries should pursue.
Luxembourg, which depends heavily on its financial industry, is the fourth euro member that is rated triple-A by the big ratings agencies. Although it had deep reservations about the Cyprus bailout because it effectively crippled the island’s banks, Michelbach urged it to join in with its top-rated brethren in fighting for stability-oriented policies in Europe.
He called France an important partner for Germany, but accused its government of engaging in “socialist experiments” that were hurting the country’s image. If Paris did not change course, Michelbach said, it could turn into a “serious problem” for the euro zone.
“We need strong partners to pursue policies that ensure stability,” said Michelbach, a member of the Bundestag lower house of parliament’s finance committee, adding that Italy was in urgent need of a stable, reform-minded government.
Reporting by Noah Barkin; Editing by Stephen Brown